KPI och affärsdriven IT Hur kommer man dit?
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1 KPI och affärsdriven IT Hur kommer man dit? Magnus Wettemark Solution Consultant Manager Nordic Area KPI och affärsdriven IT - Hur kommer man dit? Seite 1
2 Why Performance Matters? KPI och affärsdriven IT - Hur kommer man dit? Page 2
3 Performance-Driven = Aligned Business/IT Alignment, IT value creation and quality of information are the top priorities for CIOs KPI och affärsdriven IT - Hur kommer man dit? Page 3
4 For the business, KPIs are the guiding force that synchronizes strategic goals with day-to-day operational execution You Can t Manage What You Can t Measure For IT, IT, KPIs are the guiding force that allows better business alignment, improved IT IT resource allocation and more proactive innovation Peter Drucker KPI och affärsdriven IT - Hur kommer man dit? Page 4
5 Performance Driven Business and IT KPI och affärsdriven IT - Hur kommer man dit? Page 5
6 SOA Adoption SOA is no longer a question of What it is, but instead the focus has shifted towards How to adopt it. KPI och affärsdriven IT - Hur kommer man dit? Page 6
7 Business Architecture The Value of SOA and BPM in large enterprises is still mainly seen within IT Efficiency. The Agility provided by SOA and BPM needs to be lifted towards the Business Architecture. KPI och affärsdriven IT - Hur kommer man dit? Page 7
8 Measure First These days, every organization seems focused on scrutinizing costs and emphasizing improved business performance. But how do you move your IT team to align with the business and deliver real business results? The Answer? By taking a performance driven approach! KPI och affärsdriven IT - Hur kommer man dit? Page 8
9 Business Architecture Focus Business Architecture KPI och affärsdriven IT - Hur kommer man dit? Page 9
10 Performance Driven Business and IT Business Goals Measurable Results and success factors that are supported by IT Systems and Humans Mapping the Business Goals to the IT Architecture IT Architecture The IT Landscape that provides automation to the core business functions KPI och affärsdriven IT - Hur kommer man dit? Page 10
11 Performance Driven Business and IT BAM, BPM and SOA BAM KPI and business monitoring BPM and SOA The structured approach to drive business performance and agility KPI och affärsdriven IT - Hur kommer man dit? Page 11
12 Measure First Measure First KPI KPI KPI -Discover the key processes that enable business success -Define key performance Indicators -Measure the business performance in real time -End-To-End -Problem Analysis -Predictive Event Event Event Event Drive Agility -Discover where flexibility is needed to support the business demands -Find the root cause of Business and IT problems proactively -Enable IT and Business transformation based on real and justifiable needs KPI och affärsdriven IT - Hur kommer man dit? Page 12
13 How to come to a Business Oriented Architecture BOA Business Responsibilities Provide business input and priorities Business Competence Center Capture input and prepare for next steps Process competence center SOA IT Operate current systems in a cost effective way Integration Competence Center Integrate current systems in a controlled and reusable way KPI och affärsdriven IT - Hur kommer man dit? Page 13
14 What does it mean to be Performance Driven? KPI och affärsdriven IT - Hur kommer man dit? Page 14
15 What to measure? BAM measures 4 general attributes of transactions within a business process: How many? Volumes, counts of events, quantities, any numeric- based KPI How fast? Speed, cycle-times, time remaining till a deadline, any time based KPI How good? Errors, systems, sequence, duplicates, timeouts, matching, content based defects How normal? - Special conditions, events of interest, confluences of KPIs, complex pattern recognition KPI och affärsdriven IT - Hur kommer man dit? Page 15
16 KPI Driven Performance Measurement DIFOT, customer satisfaction Productivity alert resolution time Costs demurrage, no-show, etc. Reliability - # of alerts, defects SLA Violations and quality Alerts Events Process Start/End Step Start/End Step Cycle Times Sub-Process Cycle Times Status Changes Time Fence Violations Out-of-Sequence Activities Abnormal Trends Flagged orders (blocked, on hold, etc.) Non events Facts Volumes - # of containers, $ value of orders, unit volumes Cycle time variability Changes - # of changes, change magnitude, etc. KPI och affärsdriven IT - Hur kommer man dit? Page 16
17 Benefits of Business Activity Monitoring Monitoring of the business from the process perspective and not only from the information silo s Being able to answer: Why things happens instead of just that it happened Discover business issues quickly by identifying problems in real time, not through after-the-fact reports Accelerate corrective response to process exceptions by leveraging comprehensive root cause analysis Predict and avoid potential problems before they impact the business Identify and isolate IT issues from other factors during a process exception IT to solve IT problems Business to solve process problems KPI och affärsdriven IT - Hur kommer man dit? Page 17
18 Recap: Integrated Business Activity Monitoring Real-time business activity monitoring Automatically determines normal business process values, e.g., order amount Advanced event correlation Fingerprinting Compares current and historical activity to anticipate exceptions Patented technology Proactive behavior Proactively notifies users of exceptions Business can react BEFORE situation becomes critical Alert users via , web services or SNMP traps. Process drilldown Do deep analyzes Answer the question Why? Example: Automatic detection of increasing order value KPI och affärsdriven IT - Hur kommer man dit? Page 18
19 References KPI och affärsdriven IT - Hur kommer man dit? Page 19
20 Case 1: Fonterra Benefits Ability to measure DIFOT (Delivered In Full and On Time) as seen by the customer Annual benefits are being measured in the millions of dollars Faster, more accurate service since agents know the status of any order at any time Proactive problem resolution, thanks to automated alerts Drivers High level of supply chain outsourcing / dependency Less integration of global systems Less visibility/control of process and movements Challenge Want achieve end-to-end visibility across a supply chain Single screen the status of any order at any time Solution Implementing a BAM solution to monitor the end-to-end supply chain KPI och affärsdriven IT - Hur kommer man dit? Page 20
21 Case 1: Background: Three basic but critical examples DIFOT INVOICING DEMURRAGE /DETENTION We currently measure delivery performance based on when product leaves NZ Should be based on actual delivery to finally contracted destination Creates issues with overstating our own performance and disconnect with customer perception We currently invoice on delivered terms based on an assumption of transit time Should be an invoice triggered by physical delivery Creates issues with accounts receivable never in line with customers willingness to pay These are unplanned exception costs managed retrospectively from the invoice Should be a proactive alert and resolution based on real time container dwell times Creates issues with inability to actively avoid spend, unable to prove fault KPI och affärsdriven IT - Hur kommer man dit? Page 21
22 Case 1: Fonterra Single View Visibility - Where Is My Order? Order Overview Portlet Main Search. Invokes IS service to do the search and displays the results using Async table Selecting one Item from the Async table will provide the input parameters for the Order Hierarchy. Order Hierarchy gets its data by calling an IS service using WS. Selecting one Item from the hierarchy table will provide the input parameters for the OrderDetail portlet. Order Detail Portlet The Order Detail portlet will lookup detail data in IS using a WS call This portlet is also reused on the WAMA custom inbox to provide detailed business process information related to an alert. KPI och affärsdriven IT - Hur kommer man dit? Page 22
23 Case 2: Large nordic telco company Objectives Creating visibility into the supply chain with focus on Order2Cash Creating proactive handling within organization instead of reactive and reporting Business Benefits Visibility in to critical business processes knowing what is going well or not in relation to defined KPIs Ability to react and respond before something goes wrong Ability to optimize exactly where you need to optimize in the process-chain Making the process transparent and neutral easier to manage from top down Shortening TTM dramatically KPI och affärsdriven IT - Hur kommer man dit? Page 23
24 Case 3: Large nordic telco company Objectives Monitoring of goods movements Minimize the risk of production stop Minimizing the own local warehouse Business Benefits Visibility in to critical business processes knowing what is going well or not in relation to defined KPIs Ability to react and respond before something goes wrong Quickly responding to changes Securing delivery commitments and keeping cost level down Keeping customer relations and business commitments KPI och affärsdriven IT - Hur kommer man dit? Page 24
25 How can you get started? KPI och affärsdriven IT - Hur kommer man dit? Page 25
26 How to start A BAM and/or BPM Workshop Day 1 (full day) Introduction to the concepts of BAM/BPM Business Drivers of BAM/BPM The functional goal of BAM/BPM Demo of webmethods BAM/BPM solution Workshop: Definition and outline of process details Workshop: Identification of demo process data Day 2 (2 hours) Demo of the process and monitoring possibilities Discussion, WrapUp and Summary KPI och affärsdriven IT - Hur kommer man dit? Page 26
27 Free Webinar the 18th of May!!! Software AG will host a free webinar where we will discuss more in details how to become Performance Driven and talk more about references. Welcome to to enroll Thank you magnus.wettemark@softwareag.com KPI och affärsdriven IT - Hur kommer man dit? Seite 27
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